India has one of the biggest automobile markets in the world and it is also one of the leading ones in terms of growth. The commercial and passenger car industry in India is one of the top ten of its kind on a global scale.
In 2011 this industry made almost 3.9 million cars. Latest reports state that India has left behind countries such as Brazil in this regard. It has also performed better than the automobile industries in countries like Belgium, Mexico, UK, Russia, Italy, Spain, Canada and France, when it comes to the passenger vehicle segment.
Car Market in India
Over the last few decades. the car market in India have been in a burgeoning stage with all types of cars flooding the market in order to meet the demands of Indian customers who are increasingly exposed to state-of-the-world automobiles and want the best when it comes to purchasing a car.
It is expected that by 2030, the Indian car market will be the 3rd largest car market across the globe. Small cars seem to be ruling the roost in the Indian automobile market with over 7.5 lakh small cars being sold in India in 2006-07. The main encouraging factors for the success story of the car market in India are the increase in the opportunity for new investments, the rise in the GDP rate, the growing per capita income, massive population, and high ownership capacity.
The liberalization policies followed by the Indian government had been inviting foreign investors and manufacturers to participate in the car market in India. The recent trend within the new generation to get work in the software based sector has led to the rise in the income level and change in the lifestyle which has further led to the increase in the demand for different varieties of cars among them. Moreover, there are many financing companies providing easy car loans at reasonable interest rates and affordable installments.
The car Market in India is crowded with all varieties of car models like the small cars, mid-size cars, luxury cars, super luxury cars, and sports utility vehicles. Initially the most popular car model dominating the Car Market in India was the Ambassador, which however today gave way to numerous new models like Maruti, Fiat, Hyundai, BMW, and many others. Moreover, there are many other models of cars in the pipeline, to be launched in the car market in India.
Top Car Manufacturers in India
Following is a list of leading car manufacturers in the country and some important financial details of the same:
|Company Name||Market share||Cars sold during 2011-12|
|Mahindra and Mahindra||7.89%||210,700|
Car Companies in India – Latest Trends and Developments
India as a nation might be seeing a rate of economic growth that is the lowest in this decade but some sectors are still performing well, as per experts and the automobile industry is one of them.
In the first 4 months of the 2012-13 fiscal car sales have increased in India by 5.6 percent as per statistics provided by the Society of Indian Automobile Manufacturers (SIAM). .
The Society had set a target of 10-12 percent for the period and the growth is still lesser than that. However, compared to 2011-12, when the industry was pretty flat, these figures represent a better condition.
IHS Automotive has forecast that by 2016 the yearly rate of growth of sales for the automobile industry will be 10.9 percent taking the sales figure to approximately 4.88 million.
Indian Car Market Technological Regulations and Future Developments
The automobile industry in India has been trying to implement emission and safety related norms that are applicable in the international markets to make sure that the industry sees a sustainable rate of growth. It is expected that these rules will also help India improve its auto exports and become a major regional center in that regard.
It has been trying to put into practice the Emission Norms for Four Wheelers that are being used in Europe and to this end has adopted the Euro III model from April 2005 onwards in 11 metropolitan cities.
Two wheelers make up 70% of the cars in India and for them special emission norms have been created within India itself. These are among the toughest of their kind in the world.
The industry has also calibrated its safety regulations in accordance with the ECE rules and the SIAM Road Map created in 2010. It has also introduced the Lambda Measurement plan in Delhi for cars and vehicles that have three way catalytic converters.
India has also become an observer at the UNECE-WP29 and is an active participant in GTR evolution that will help in better implementation of the standards.
At present Indian automobile companies are trying to come up with new products and one of them is Mahindra that is expected to bring out an electric version of Verito, its entry level Sedan. The organization is presently developing electric adaptations of its utility vehicles and light trucks.
The Chief Technology Officer of Mahindra Reva which is the electric car making division of Mahindra, Chetan Maini, has told the media, that they are working on developing electric versions of Geo and Maxximo, light trucks. Maini, who is an 18 percent shareholder in Reva, besides being its founder, has stated that the organization wants enough charging stations and better markets prior to introducing light trucks operated on batteries.
Government initiatives for Indian car market and its manufacturers
The Indian Government has introduced the National Automotive Testing and R&D Infrastructure Project (NATRIP) that will look to create core competencies in the national automotive sector that are at par with global standards. This project will also help the Indian auto industry become a key part of the world economy.
The project will aim to create the very best infrastructure in testing, research and development, and validation and help the industry gain international repute. The project will invest INR 1718 crores in 3 automotive centers across the country for establishing top class homologation facilities. These centers are:
|Ahmednagar and Pune||Western India|
The government has also announced the Automotive Mission Plan for 2006-2016 and aims to make India a global center for the automobile industry. The plan aims to focus on the following areas:
- Making and designing of automobiles
- Making and designing of auto components
It also looks to take the industry output to 145 billion US dollars by 2016, which is expected to account for at least 10% of the GDP by then. This can also generate extra job opportunities for 25 million people by that time.
The plan also aims to make sure that the industrial production reaches the INR 600000 crore mark by 2016 – at present the figure stands at INR 169000 crores. The plan will also look to increase the role played by this sector vis-à-vis the national economy and other important parts of it.
The plan also looks to bring up the automobile certification and testing facilities in India at par with global standards.
Major Bodies of Indian Automobile Industry
The Department of Heavy Industry of the Ministry of Heavy Industries and Public Enterprises is responsible for promotion of the national auto industry’s development and growth. It helps the industry in its achievement plans in the following ways:
- Policy initiatives
- Promotion of technological upgradation and collaboration
- Appropriate interventions for trade and tariff restructuring
- Promotion of research and development
The Society of Indian Automobile Manufacturers (SIAM) is the leading industry body and represents 46 of the top vehicle and engine makers in the country. It is a crucial medium of communication for the industry with governmental, international and Indian organizations. It functions in association with the various companies and is an active participant when it comes to creating rules, policies, and regulations for the industry.
Problems faced by Indian car manufacturers
Over the years the Indian auto industry has faced medium levels of volatility but the problems have gone up in the last few years. One of the major issues for them has been fluctuation in prices of oil and metals. The inconsistencies in assistance and laws for the industry have also been critical in this regard.
Last Updated on 4/21/2015